Everything must be made as simple as possible. But Not Simpler-(Albert Einstein)
The system works when you work it!
In this blog post I will share with you the importance of setting a new rule that from this day forward, for any dollar that comes in, you will pay yourself first at least 10%. As well as the importance of getting out of debt as soon as possible. You will get clear on what your day-to-day expenses and spending plan are. And how important it is to stick to the plan, not deviating. I will share the story of how I lost my job and I literally had no financial stress about it, because I had my sanity nugget saved. I have done this system for the past 18 years and it 100% works if you stick to it.
I will share with you the 3 steps to financial sanity…
1. Pay Yourself first- 10%
2. Debt Destroyer Account
3. Know Your Day to Day Expenses
4. Stick to the System
The outcome is to Alway Always Always pay yourself first, no matter what. To have real freedom by being debt free. You will learn an easy system on how to organize your finances so that you know exactly how much you have to spend or not. This awareness saves you from spending money unconsciously on things that don't really matter, this new approach will help you actually accomplish your dreams.
So there are two accounts that go ahead of all the rest. And the first one is this, you must pay yourself first. Any dollar that comes in from any kind of means you pay yourself first, you pay at least 10%. Do more if you can. I usually did 30%. If you're able, but you want to get up to being able to put 30% away. No less than 10%. You pay yourself first, and you put it into savings. Period.
The second account... Number two is your debt destroyer account. If you have debt, 20% of every dollar that comes in, goes into that debt destroyer account. And you use that to actively pay off your debt. You do not want to have debt, that holds you back. Debt keeps you from feeling free. What you want to do is, get six months of whatever your needs are. So if you add up your monthly nugget of just your needs, your rent, mortgage, food, gas, water, electricity, phone, and any other needs, and you multiply that number by six, that gives you what I call your Sanity Nugget.
You want to have at least six months of your monthly nugget put away in an account. This is your Sanity Nugget, why? Because if shit hits the fan. And in life, it sure does, you do not have to lose your sanity. You have six months of your needs met so that you can find a different job, one that fits you, and one that you're excited about. Instead of what most people do, they panic and they pick whatever they can find. I literally have lived this out a few times. The best example of this is this past year in COVID. I lost my job of eight years. It was a huge shock. I did not see it coming but when I heard the news, I shrugged my shoulders, and said, "Oh, well. Life is happening for me. There must be a gift in this somehow, and thank God, I have my nugget. So I didn't have to worry, I didn't have to stress, because I had my Sanity Nugget. I can't even tell you how big a deal this is. Once you have your nugget, do not touch it. I repeat, Do not touch it. The only time you are to touch that nugget is if shit is literally hitting the fan. Like you've lost your job or you just went through a hurricane or somebody gets really sick. Yeah, you want to really avoid using that nugget. But when you've got to use it, just be super grateful that you have it.
The other thing that I do is I don't use credit cards for actual credit. I know this sounds kind of obvious. But in this world, the program that currently exists is you must use credit. Credit is what the program, the system, wants you to do. The system is so backwards that you can't even rent a house without credit, which means you have to be in debt in order to get a credit score so that you can rent a place. It's crazy, but it's the way that it is. I don't use credit cards for actual credit. I use them for very few things, and I use it when I know I have the money already in the bank. You will save yourself so much stress if you don't spend the money unless you have it. Period.
If you don't have the money, you don't buy it. With the exception of buying a house, or a car maybe, But anything else, If I don't have the money, I don't buy it. With the envelope system, you will get there faster than you could ever think. It's so much fun. One of my favorite memories is looking at Tate one day, he was 16 at the time, and he had new clothes on. "Hey dude, where did you get those clothes?”, because I'm the one who buys his clothes normally. He turns around and he looks at me with a huge smile on his face and he goes "Mom, I had $400 in my clothes account". He did the envelope system. I've been teaching my sons this since they were old enough to understand. He was making some money and he was following the system. He put the money away as it came in and he had $400, to spend on clothes. Here's the beautiful thing, it's guilt-free spending. If you have money in the massage envelope, you get to have a massage. You're not taking from anything else that's important. If you have money in the vacation envelope, go take a vacation. Go have fun, spend it. That's what it was designed and dedicated for knowing that all your needs and all the important things are taken care of. It's amazing. I can’t even tell you how much this system transforms your life to Epic!!
How you can learn from me…
1. Pay Yourself first- 10%
The importance of this step is to set a new rule that from this day forward for any dollar that comes in you will pay yourself first at least 10% and put it into a Savings Account.
I do this step by sharing how I lost my job and I literally had no financial stress on me because I had my nugget saved.
To start…
A: Take the monthly nugget and times it by 6 - to get your Sanity Savings Nugget
The first step here is to understand that you pay yourself first. Period. You pay yourself at least 10% or more to yourself first. I don’t care if it’s 20 bucks that comes in, at least 2$ gets put into savings. Period. Repeat after me, “ I always pay myself first. Period!” Again, “I always pay myself first. Period”. Again, “I always pay myself first. Period”. This 10% or more goes into your Sanity Nugget account. Right now I want you to take your monthly nugget(needs for the month) and times it by 6. This will give you your 6-month Sanity Nugget minimum. You will save money and place it in this account until you have that 6-month sanity nugget number. So for example if your monthly nugget is $3200 a month, then your 6-month Sanity Nuggets would be 19,200. That 3200 x 6=19,200. That means you should save until you have that amount put away. You do that by only taking 10% or more off of every dollar that comes in. You will be surprised how fast this will add up and how much certainty it gives you to know you have it. If you can have it automatically put into that specific account every pay period, do that. Otherwise, it’s the first thing you do before you pay bills. I have had to use mine a few times when shit hit the fan, like in losing a job due to an economic crash, and a pandemic. Trust me you will be glad you have it. If you have a low month and you can’t take care of your needs, then you would dip into the Sanity Nugget account to take care of that. When you have extra, you will pay back the Sanity Nugget account before you pay into your Dream List Account.
B: Set up a Sanity Savings Nugget account
Step 2 is to set up a Sanity Nugget Account separate from any other account. You will place the 10% or more there every pay period and not touch it. What you get to do is watch it grow, and smile to yourself at what a rock star you are. I love my Sanity Nugget. It keeps me sane. So open one now. If you can’t do it this minute then schedule a time to go to the bank asap and make that happen.
C: If Sanity Savings Nugget is full for 6 months or more, put this 10 % in the Investment to Spend Account
The next step is to know that once you have a 6-month Sanity Bucket saved, then you can use the 10% or more that you have been putting in there and instead start a new account called your Investment to Spend Account. Use this for bigger investments like real estate. When you continuously feed this account, eventually you will have enough for a downpayment of a home, or second home, or investment home etc. I used the money in this account to build my parents’ house, my Aunts house and an Airbnb. I receive rent from my Aunt and income from an Airbnb rental. It’s best to use this fund for investments that will bring you passive income. So open an Investment to Spend Account separate from anything else. Even if you aren’t ready to fill it yet because you are still filling up your Sanity Nugget Account, open it so that you are ready for when that day comes.
The outcome of this step is to Alway Always Always pay yourself first, no matter what.
2. Debt Destroyer Account
The importance of this step is to get out of debt as soon as possible.
I do this step by sharing how I don't use the credit card for actual credit, how my houses are paid off, I am debt free and it is amazing to be free and feel free!
Here’s how you do it…
A. Don't use Credit Cards for Credit
This first step is easy…. Don’t use credit cards for credit. Period. In fact, I would cut up all but 3-5 major credit cards and cut up any other card or department cards. You use the major credit cards only to ensure you are contributing to your credit score. I pick one or two recurring charges, like from Kindle or Netflix so that I have something to pay every month, but that’s it. Why? Because credit cards are trouble, we all know it, so why put yourself in that position? I’m suggesting that Credit cards are only to be used to build credit or to buy large ticket items in order to get the points, but knowing you have the cash in the bank to pay it off when it is due. If you do just this one thing, your life will transform. I’ve watched it over and over again with my clients. I also suggest you lock up the credit cards you end up keeping in your safe and not have them in your wallet. If they aren’t there you won’t use them unless it has been thoroughly thought out.
B. If you have Debt put at least 20% of every dollar towards clearing debt
The second step is, if you have debt, put at least 20% of every dollar towards clearing that debt. Yep, that’s what I said. Make paying off your debt a priority. Especially personal debt. Debt, that some beautiful soul bailed you out of a jam and they no longer have that money, to do with what they would like. No vacations and frivolous spending if you still owe someone who helped you out. Ask your higher self, “ Have I been taking my debt seriously? “Is there anyone that I need to pay back ASAP because they helped me out of a jam once?” Be honorable. Be men or women of your word, and pay back your debt as fast as possible. It will feel amazing and you will gain personal power back.
C. Organize your Debt From the Smallest to the biggest amount and pay off the smallest first and move up to the biggest - progress = Happiness.
In general, when it comes to debt, the smartest way to pay it off, is to organize it from the smallest to the biggest amounts and pay off the smallest ones first and move up to the biggest. Why, because progress equals happiness as the great Tony Robbins likes to say and I agree. Progress does equal happiness. So celebrate any debt that’s paid off. Ask yourself right now, “Is there a big or small debt that I could pay off right now?” If so do it, right now, do it, pay it off, and then celebrate!!!
D. If Debt Free - add the 20% to your Sanity Savings Nugget or Savings to Invest Account
If you are debt free, then right now I want you to get up out of your chair and do a little jig, pat yourself on the back, and seriously, celebrate! In the current world, we live in, that is amazing! So if you are debt free, or when you become debt free by following these tips, put the 20% you were paying towards your debts into your Investment to Spend fund. That means you will be putting 30% or more in there per pay period. This will allow you to continue to grow your investments and passive income! Yippee. This is how I was able to put 30% away, as I am debt free. It is super fun to see that fund grow and then be able to do something big with it when you are ready.
I realize there are a lot of different ways to do things, this is how I have done it and it has worked amazingly for me and so many of my clients! It works if you work it!
The outcome of this step is to get to real freedom by being debt free.
3. Day to Day Expenses
The importance of this step is to get clear on what are your day-to-day expenses and your spending plan.
I do this step by sharing how I carry my Food, Gas and Fun Envelopes with me with the correct cash in them.
Here’s what you want to do…
A. Write expense items and the monthly amount on individual envelopes:
Write down how much per pay cycle to put in each envelope (If you get paid weekly then divide the monthly number by 4 for example)For example like this.
Savings- 10% of every dollar
Mortgage/rent -$1000 per month -$250 per week
Food -$600 per month - $150 per week
Gasoline- $400 per month -$100 per week
Electric - 400 per month - $100 per week
Gas for water heater -$100 per month -$25 per week
Phones X 2 -$200 per month -$50 per week
Internet -$110per month -27.50 per week
Life Insurance
Health Insurance
Doctor
Vet
Clothes
Etc
Now Dream List begins
Vacation to Italy -$5000
New Car- $30,000
New Kitchen floors -$20,000
Bathroom remodel -$10,000
Gym equipment -$1000
Take kids to Disney-$3000
etc
B. Place the correct cash in each envelope each pay cycle.
Each pay period, place the correct amount into each envelope or system you are using. I have used physical envelopes for years keeping most of the money in separate bank accounts. I now use YNAB which stands for You Need a Budget. It's a great tool to organize your finances. Fill your needs first then your dreams, every time without exception.
The outcome of this step is to have your expenses clear and cash in each corresponding envelope.
4. Stick to the System
Stick to the plan, no deviating.
I do this by sharing the story of how I have done this system for the past 18 years and that it 100% works if you stick to it. If you half-ass do it, you aren't doing it.
Here’s how you do it…
A. Don’t spend it if you don't have it
There are a few rules to live by with this glorious system. The first one is: If you don’t have it, you don’t spend it! Period. Repeat after me…
“If I don’t have it, I don’t spend it!” again, “If I don’t have it, I don’t spend it!” again “If I don’t have it, I don’t spend it!” Easy. Follow this rule and I promise you it will transform your life!
B. If you go over budget in some way you must consciously decide what envelope it's coming out of so you would have less in that envelope to spend later.
The second rule is: If by some mistake you go over budget in some way, you must consciously decide what other envelope it’s coming out of. For instance, if you have 3000 budgeted for your vacation and you spend $3500. You need to find $500 in another category, like maybe out of your kitchen floor fund or something like that. You must keep things balanced. If you overspend then you have less to spend in another category. No exceptions. Period. Stick to this rule and it will also transform your life!
C. Guilt-free spending
The third rule is: Enjoy guilt-free spending! No more guilt allowed. This process allows you to take care of your needs and wants in a responsible manner. Yippee. Enjoy!! Just like my son Tate did when he bought himself $400 worth of new clothes because that is what he had saved up in his clothes envelope/category. It’s so much fun to spend funds that are allocated to pay for that item! It’s even fun to pay your bills because you have the money there to pay them! Be thankful you have money to pay your bills, I’m sure most of us can relate to a time when maybe that wasn’t true. Enjoy from now on Guilt Free Spending!
When it comes time to pay the bill or take a vacation you have that money there!
When you follow and implement these steps you will have a system that works when you work it! You will know the importance of setting a new rule that from this day forward, for any dollar that comes in, you will pay yourself -10% or more to create your Sanity Nugget. As well as the importance of getting out of debt as soon as possible. You will get clear on what your day-to-day expenses are, and have a spending plan. You will understand the importance of sticking to the plan, and not deviating. Like in the story of when I lost my job and I literally had no financial stress about it, because I had my sanity nugget saved. You will have the 3 steps to financial sanity.
1. Pay Yourself first- 10%
2. Debt Destroyer Account
3. Know Your Day to Day Expenses
4. Stick to the System
The outcome is to Alway Always Always pay yourself first, no matter what and to work towards having real freedom by being debt free and having a 6-month Sanity Nugget. You will learn an easy system on how to organize your finances so that you know exactly how much you have to spend or not. This awareness saves you from spending money unconsciously on things that don't really matter. This new approach will help you actually accomplish your dreams. I have done this system for the past 18 years and it 100% works if you work it!
Your Action Steps: Are to implement the steps above, and come back and let us know what your results are!
READ the whole story http://www.getyourshittogether.life